Located in Central Asia on the historical Silk Road, Kyrgyzstan is arnmountainous country famous for its natural heritage including its highrnpeaks, glaciers, lakes, snow leopards and other attractions. The KyrgyzrnRepublic gained its independence in 1991 and embarked on a transitionrnto a democratic system of governance and a market economy. Today, therncountry of 5.2 million is host to a growing private sector and arnvibrant civil society. It is a member of many internationalrnorganizations, including the World Trade Organization and the ShanghairnCooperation Organization. The economy has grown at an average rate ofrn4.4 percent since 2000, and the percentage of the population living inrnpoverty has fallen from 52 percent in 2000 to 39.9 percent in 2006.

While these are positive developments, the country lags behind in a number of social indicators. The global 2007 Human Development Report ranks Kyrgyzstan 116th with a Human Development Index rating of 0.696,rnpointing to regional and urban/rural disparities as well asrninequalities between men and women. In 2007, the Government of thernKyrgyz Republic approved a Country Development Strategy that identifiedrnthe main challenges and priorities for the country from 2007 to 2010.rnAlthough it is landlocked and has few natural resources, the country isrnset on its route to development.

The Kyrgyz Republic’s closernproximity to three fast-growing countries (China, Russia andrnKazakhstan) provides an opportunity for it to expand its exports. Evenrnafter a decade and a half of transition, production in the KyrgyzrnRepublic is mostly concentrated on primary agricultural goods (cotton,rntobacco and hides), services, extractive industries (gold mining),rnconstruction materials and light industry. Import growth ratesrnsignificantly outpace export growth rates, resulting in a negativerntrade balance that exceeded $1 billion in 2007. A steady and growingrnflow of labour migrants has led to a significant flow of remittancesrninto the Kyrgyz economy, mainly from Russia and Kazakhstan.

Largernforeign debts still hinder the country’s sustainable development,rnnotwithstanding the substantial debt relief the country received fromrnthe Paris Club in 2002 and 2005. As a consequence, the Kyrgyz Republicrnmaintains a tight budget, resulting in insufficient budget allocationsrnfor social welfare spending. Most GDP growth has been used to increasernprivate consumption; state consumption has not grown significantly.

Key indicators of the Kyrgyz Republic, 2000-2008:

Source: Country Development Strategy, National Statistics Committee, World Bank and Human Development Reports